Buyer side due diligence team
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I’m interested in hearing if your M&A team has used a third party to support due diligence, and if so, what type of firm. We recently completed a small-mid size acquisition with an in-house team, but would like to consider using a third party in the future to facilitate larger deals. If you have used this type of firm, are you used to a flat fee or a commission as a function of purchase price?
Thanks in advance!
I’ve used Deloitte and Mercer in the past. These were large-scale integrations, and their fees were in the millions. Depending on your industry, there may be smaller, more boutique firms out there. I’m now in construction so I use PMI, which is a lot cheaper than Deloitte and Mercer however, it is specific to my industry.
Hello – at two different companies, we’ve leveraged EY for various services during larger transactions. One of the best engagements I’ve participated in, we hired them to help us through the due diligence and planning process post close, but also had them include in the scope help to support building out customized playbooks for us to repeat this process in house for other deals. It was a fantastic way to help build up a new function on our team and shore up our internal knowledge and capabilities so we could save cost on future deals.
Mallory, your company that baked customized playbooks into their engagement for re-use sounds like a brilliant idea. I imagine EY was playing the long game, getting your firm to follow their best practices, embolden them to be more acquisitive, and be front-of-mind again for a future engagement too large for your firm to handle on its own. Well done on both sides!
We leverage a cross-functional due diligence approach led by an internal resource with experience in M&A. Each functional leader has an established checklist, and brings in other specific functional insights to the due diligence process. We also leverage mid-tier consulting firms to assist where needed in DD and other aspects of the deal.
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